SEBI To Review F&O Market Data Till June Before Taking Action Post Phase 2 Reforms
The markets regulator has already analysed trading data between December 2024 and March 2025—months that followed the implementation of the initial curbs.
The Securities and Exchange Board of India is expected to wait until at least June 2025, before taking any steps post phase two of reforms on the equity derivatives (F&O) segment, according to people familiar with the matter.
The markets regulator has already analysed trading data between December 2024 and March 2025—months that followed the implementation of the initial curbs on trading in derivatives segment. However, this period was influenced by multiple factors beyond just the regulatory curbs, according to SEBI. It is, therefore, adopting a wait-and-watch approach.
Initial findings show a notable year-on-year decline in index options trading volumes. Premium turnover—a measure of the actual amount paid to buy options—fell by 15%, compared to the same period last year. The decline is more apparent when measured by notional turnover, which dropped 34% year-on-year. However, when compared to data from two years ago, the trend remains upward. Premium turnover is still 11% higher, and notional turnover has risen by 47%.
Looking at the activity of individual investors, their participation in index options fell modestly—by 5% in premium terms and 16% in notional terms—on a year-on-year basis. But over a two-year period, the growth is sharp: premium turnover among individual investors is up 34%, and notional turnover has nearly doubled, rising 99%.
The number of individual traders in the derivatives segment has also decreased 12% from the previous year. Yet, this base remains much larger than it was two years ago, with trader participation up 77%, compared to the March 2023 quarter.
The regulator remains concerned about the extremely high share of derivatives—especially index options—in India's total market activity, people in the know told NDTV Profit. Additionally, India continues to lead globally in equity derivatives trading volume.
SEBI plans to revisit the data after June 2025. Any decision on further regulatory tightening or structural changes is likely to be made only after this review.
